Infrastructure

Kenya to Take Out Sh20bn Loan for Mombasa Port Upgrade

The project is part of the Kenya Ports Authority’s Sh310 billion ports investment program.

Updated on

October 28, 2019

Mombasa port — Cargo handling at the port of Mombasa. PHOTO | FILE

The Kenya Ports Authority (KPA) has announced a Sh20 billion plan to upgrade four berths at the port of Mombasa to handle both cargo and goods not packed in containers.

The investment is driven by growing demand for imported cargo in the region, where most economies are growing by at least 5 per cent annually, according to KPA managing director Daniel Manduku.

Exports make up just 15 per cent of the cargo that goes through Mombasa every year, with a third of the total belonging to neighbouring countries, while Kenya, the region’s biggest economy, takes up the lion’s share.

Annual cargo traffic through the port is projected to jump to 47 million tonnes in 2025 from 32 million tonnes last year, Manduku said in an interview at the port.

“We are currently undertaking major expansion programmes… We are trying to be ahead of the game,” said Manduku.

Mombasa Port, built in 1895, is the main trade gateway for the Eastern Africa region, serving Kenya and seven neighbours, including Uganda, Somalia, Rwanda and South Sudan.

The volume of cargo handled is expected to rise to 34 million tonnes this year, including 1.4 million 20-foot containers. Popular imports include clinker for cement manufacturing, steel, fertiliser and grains.

The European Investment Bank and French development agency AFD have offered to finance the modernisation of the berths at commercial rates, he said.

“We think it is something we should consider, as opposed to normal commercial bank loans,” Manduku said, adding that work will start in mid-2020.

Mombasa port, ranked Africa’s fifth busiest according to the KPA after Morocco’s Tangier Med, Egypt’s Port Said, South Africa’s Durban and Nigeria’s Lagos, wants to rise to number three, Manduku said, without giving a timeframe.

KPA is spending an additional Sh39 billion to build a new oil terminal, to replace its existing facility that dates back to 1968.

China Communication Construction Company is the contractor for the project, which will triple the port’s annual capacity for oil and liquid gas to 1 million tonnes.

“The demand for liquid oil is high,” Manduku said, adding the facility could also help with Kenya’s crude oil exports.

Britain’s Tullow Oil and partners, including the Kenyan government, are expected to make a final investment decision on crude oil production from fields in the far northern county of Turkana next year.

Current investments by KPA are part of a 310 billion shilling ports investment program, aimed at boosting annual capacity to 110 million tonnes by 2040, Manduku said.